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Last update: 07/28/14

ICBA Policy Resolutions for 2014
Track I: Legislation and Regulation

THE SEPARATION OF BANKING AND COMMERCE

Position

  • ICBA supports the separation of banks and commerce. Allowing corporate conglomerates to own banks violates the U.S. policy of maintaining the separation of banking and commerce.

  • Now that the ILC moratorium in the Dodd-Frank Act has expired, Congress should permanently close the industrial loan corporation (ILC) loophole in order to keep banking and commerce separate and to keep Wal-Mart, Home Depot and other commercial conglomerates out of banking.

Background

The long-standing policy prohibiting affiliations or combinations between banks and non-financial commercial firms (such as Wal-Mart and Home Depot), has served our nation well and was reaffirmed by the Gramm-Leach-Bliley Act (GLBA). Allowing corporate conglomerates to own banks violates the U.S. policy of maintaining the separation of banking and commerce, jeopardizes the impartial allocation of credit, creates conflicts of interest and a dangerous concentration of commercial and economic power, and unwisely extends the federal safety net to commercial interests.

ICBA was the first national bank trade association to oppose Wal-Mart’s ILC application, and continues to exercise national leadership on the banking and commerce issue. The Dodd-Frank Act extended the FDIC’s moratorium on new ILC charters for three years but it expired in 2013. ICBA will advocate for permanent closure of the ILC loophole in order to keep banking and commerce separate and to keep Wal-Mart, Home Depot and other commercial conglomerates out of banking.

Staff Contact: Chris Cole

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